5 June 2018 by Steve Eminton

DS Smith among trio of paper sector deals

The UK’s paper recycling and production business DS Smith looks set for further international expansion with the proposed purchase of Europac, a leading Western European integrated packaging business.

In other recent developments in the paper sector, Chinese paper mill and recycling business, Nine Dragons, is to acquire a business in the United States, while in the UK tissue sector firm Northwood is selling its stake in Northwood and Wepa, which has the Bridgend mill in Wales, to the company.

DS Smith

In what is seen as a huge development in the European packaging sector, DS Smith announced yesterday (4 June), that it is offering to buy Europac for £1,453 million. The business is currently a 42% family-owned, Spanish listed business. DS Smith said Europac is a “highly complementary and vertically integrated packaging business.”


Production of packaging material at Europac

In a statement DS Smith said: “The acquisition has a highly compelling strategic rationale and DS Smith expects that it will create significant value for customers and consistent and attractive returns for DS Smith shareholders.”

And, the proposed purchase has the support of Europac’s board of directors who are said to see it as “friendly and attractive, subject to fiduciary duties and to further assessment of the Acquisition on the basis of the documentation”.

Miles Roberts, Group Chief Executive of DS Smith, said: “The acquisition of Europac is a very exciting development for DS Smith, strengthening our position as a leading global supplier of sustainable packaging solutions. We have a long-standing relationship with Europac, which is a company we have long admired, given the quality of their assets, employees and customers. This acquisition will enhance our customer offer in Western Europe, a key packaging growth region, and help us meet the rising demand for our high-quality packaging and sustainable products. It will also strengthen our global supply chain and means we can serve our, and Europac’s,customers better.”

Beer packaging

Beer bottle packaging made by Europac

Europac said that it is the “only manufacturer of kraftliner and coated papers in southern Europe, as well as the leading packaging supplier in Portugal, and the fourth-largest in France and the Iberian Peninsula, where it is also the second-largest recovered paper manager on the Iberian Peninsula.”

Nine Dragons – USA

Also in the packaging sector, which is a major user of mixed paper for recycling and used cardboard, one of the major Chinese paper manufacturing and recycling firms, Nine Dragons – which operates through purchasing business ACN in the UK – has announced it is to buy pulp and paper mills in the United States.

The move is seen as a significant step for the company which is already operating outside of China and gives it a stronger position to supply US customers and compete with American and other businesses.

Nine Dragons

The Rumford paper mill to be acquired by Nine Dragons (picture: Alexius Horatius)

In a statement issued on 25 May, ND Paper said it had agreed to buy the Catalyst Paper Corporation’s Rumford, Maine and Biron, Wisconsin paper mills for US$175.0 million.

“We are very pleased to welcome the Rumford and Biron mills to the Nine Dragons family. We are committed to making these mills more competitive on a global scale, while staying true to our core values as an environmentally friendly and socially responsible enterprise with utmost respect for our employees,” said Yan Cheung, Chairlady of Nine Dragons.

She continued: “We look forward to working with the teams and communities in Maine and Wisconsin as we embark on this next phase of expansion together.”

The acquisition is described by Nine Dragons as “an upstream integration of the Company’s current business and is an important step in executing the Company’s global fibre sourcing and customer strategy.”

Northwood and Wepa – UK

In the UK, it has been announced that the Northwood shareholder side of the tissue business Northwood & WEPA, a private label supplier,  has reached agreement to sell its 50% share in the joint venture business. Completion is planned for 5 July 2018.

The UK business is centred around the Bridgend mill which is an integrated mill covering 75 acres, containing a paper machine and 6 converting lines.

WEPA is one of Europe’s largest private label paper suppliers, with 9 production sites across Germany, Poland, France and Italy.

Toilet tissue paper from Northwood and Wepa

Paul Fecher, chairman of Northwood commented “We have enjoyed being part of the development of the joint venture business over the past five years and have worked well with the N&W team. On behalf of Northwood we would like to wish our friends at N&W good luck for the next stage of their journey. The transaction now gives our leadership team and the whole Northwood family of companies the opportunity to accelerate our continued growth across the Hygienic sector.”

Paul King, Northwood Away from Home CEO commented: “These are very exciting times for Northwood. We are proud of what we have achieved to date. We will now clearly focus our efforts in achieving our vision in becoming the market leading partner of choice in the Away from Home tissue industry”.

“We have grown to become one of the leading manufacturers in the Away from Home tissue sector.”

Paul King
Northwood Away from Home

“Established in 1976 to focus on the supply of paper to the converting sector, we have grown to become one of todays’ leading manufacturers in the Away from Home tissue sector. More recently, our multi-million-pound investment programme in state of the art manufacturing facilities, has created a platform that will facilitate further growth. The investment programme is significant and will continue over the next few years.”

Northwood has waste paper as part of its feedstock and has tissue mills across the UK including in Lancaster and Disley.

Related links

DS Smith
Nine Dragons
Northwood and Wepa


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